Farmers wishing to leave the industry could receive a lump sum payment of up to £100,000 in plans set out by the Government to allow them to exit in a managed way.
The Lump Sum Exit Scheme is due to open in April and the application period will run until the end of September. The payment will be based on the average direct payments made to the farmer for the 2019 to 2021 Basic Payment Scheme years. This reference figure will be capped at £42,500 and multiplied by 2.35 to calculate the lump sum, meaning that farmers could receive up to around £100,000.
The Scheme is part of reforms set out in the Agricultural Transition Plan, which outlines plans for a new, fairer system of farming that works in the best interests of farmers now the UK are outside the Common Agricultural Policy.
In return for their payment, farmers will surrender their entitlements and be expected to either rent or sell their land or surrender their tenancy to create opportunities for new entrants and farmers wishing to expand their businesses. The Government has also been working in partnership with industry leaders, local councils and landowners to design a New Entrants scheme to create real opportunities for new farmers.
Environment Secretary George Eustice said: “The purpose of The Lump Sum Exit Scheme is to assist farmers who want to exit the industry to do so in a planned way and provide them with the means to make a meaningful choice about their future. The Scheme will also free up land for new entrants to farming and those who want to expand their businesses.”
Direct Payments currently made through the Basic Payments Scheme offer poor value for money and are based on how much land a farmer has, which inflates rent and can stand in the way of new entrants. Following the consultation, the Government will also progress with plans to separate Direct Payments from the amount of land farmed, from 2024.